Spotify to boost premium pay service with Universal Music deal

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Headphones are seen in front of a logo of online music streaming service Spotify in this February 18, 2014 illustration picture. REUTERS/Christian Hartmann/File Photo

(Reuters) - Music streaming service Spotify said on Tuesday it had signed a deal with Universal Music Group that lets artists release new albums exclusively on its paying premium service for two weeks.

Spotify, a rival to Apple Music, has yet to report a profit as it expands, but is under pressure from some artists who have boycotted the usually free service and needs to show investors it can generate cash as it considers a U.S. listing.

The multi-year license agreement with Universal Music could make Spotify more attractive to Universal Music’s artists, who include Taylor Swift, Adele, Lady Gaga, Coldplay and Kanye West.

“We know that not every album by every artist should be released the same way, and we’ve worked hard with UMG to develop a new, flexible release policy,” Spotify Chairman and Chief Executive Officer Daniel Ek said in a statement.

“Universal artists can choose to release new albums on premium only for two weeks, offering subscribers an earlier chance to explore the complete creative work, while the singles are available across Spotify for all our listeners to enjoy,” he said.

Spotify said the deal also covered collaboration on marketing campaigns and would give Universal Music “unprecedented access” to data.

Spotify did not disclose details of the agreement in the statement, such as the fee structure or its exact duration, and a company spokeswoman declined to provide further information.

Launched in 2008, Spotify said last month it had reached 50 million paying subscribers, a rise of 25 percent in less than six months, extending its lead over Apple Music.